Though debatable, Social Security is widely believed to be America's most important social program. More than 42 million retired workers receive a stipend from the program each and every month, and this figure is only expected to climb considering that more baby boomers than ever are reaching the eligible retirement age, and retirees are living much longer than they did decades ago. In fact, 62% of all retired workers receiving a monthly benefit count on that check for at least half of their income.
But if there's one consistency about Social Security throughout the years, it's that most consumers don't understand the basics. A February 2015 survey conducted by MassMutual Financial Group on Social Security found that just 28% of the 1,513 people who took its 10-question, true-false online quiz were able to muster a passing grade of seven out of 10 correct (or better). Just one individual managed a perfect score on what was deemed a quiz on basic Social Security concepts.
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Seven odd Social Security facts
While we've recently covered some of the top questions pre-retires and retirees are likely to have about Social Security, there are a sea of weird quirks about the program that are almost certain to fly under the radar of the average American. Here are seven of what might be described as the weirdest Social Security facts you'll ever see.
1. You don't have to work a day in your life to receive benefits
Traditionally, we're told that the way to qualify for Social Security retirement benefits is by earning 40 lifetime work credits. A maximum of four of these coverage credits can be earned annually, with $1,320 in earned income in 2018 equating to one lifetime work credit. While most people will earn their way into receiving Social Security benefits after 10 years in the labor force, some folks are actually able to receive Social Security benefits without having worked a day in their lives.
For example, if one spouse worked throughout their lifetime and the other did not, and the working spouse passes away before the spouse who didn't work, the surviving spouse can receive a monthly survivor benefit from Social Security based on their deceased spouse's earnings history.
2. You may be able to claim Social Security benefits well before age 62
You may also be well aware that the earliest you can claim Social Security retirement benefits based on your own earnings history is age 62. However, there are a few quirks in the system that allow folks to lay claim to survivor benefits at a much earlier age.
For example, widows and widowers have the option of claiming survivor benefits as early as age 60. But if the surviving widow or widower is disabled, he or she has the option of claiming benefits as early as age 50.
It's also worth pointing out that disability benefits (there are more than 10 million people receiving Social Security disability payments each month) can be paid out at any age, and dependent children may qualify, too. Social Security isn't just for those aged 62 and up.
3. Even if Social Security's asset reserves are depleted, the program won't be insolvent
The consensus among most pundits is that the Social Security program is in deep trouble. The latest Social Security Board of Trustees report estimates that the program will begin paying out more in benefits than it's generating in revenue by 2022. Just 12 years later, in 2034, Social Security's $3 trillion in asset reserves are expected to be completely exhausted.
Yet, here's the thing: Even if the Trustees are right and the asset reserves are totally depleted, the program can't go bankrupt -- and payroll taxes are to thank. As long as Americans keep working, the 12.4% payroll tax on earned income between $0.01 and $128,700 (in 2018) will continue to be collected. The payroll tax assures that there will always be revenue that can be disbursed to eligible beneficiaries. It doesn't mean a cut to benefits may not be necessary at some point in the future, but it ensures that the program can't go bankrupt as long as the payroll tax remains in place.
4. You can actually get a new Social Security number (under special circumstances)
Most Americans are probably under the (correct) assumption that the Social Security number you're assigned is yours and yours alone. It stays with you from the moment you're born till the day you die, never to be seen again. However, what you might not realize is that the Social Security Administration (SSA) will, under certain circumstances, let you change your Social Security number.
If, for example, you've been the victim of identity theft, and you can prove this to the SSA, you'll have a strong case to be made for your Social Security number to be changed. Similarly, if your life is in danger as a result of someone being able to track you using your Social Security number, the SSA is liable to change your number.
5. Your benefits are protected from private creditors, but not Uncle Sam
America is a nation that runs on credit. Earlier this year, the Federal Reserve released data showing that aggregate credit card debt hit $1.027 trillion, which is an all-time record. And if you don't pay your debts, private creditors are bound to hound you for payment. But that's not the case when it comes to Social Security income, which is completely protected from private creditors. They can't touch it.
However, the same isn't true for Uncle Sam. Should you owe back taxes, federal student loans, back alimony, or child support, Uncle Sam has the right to garnish a percentage of your monthly benefits. In 2015, according to the Government Accountability Office, 173,000 Social Security recipients had their monthly checks garnished to some degree because of defaulted student loans. This number is only expected to grow as time passes.
6. Your ex-spouse may be able to lay claim to your benefits (without actually impacting your take-home)
In a given year, about 1.2 million people will get divorced in the United States. Though the divorce rate has been falling since the 1980s, it nonetheless creates a messy set of tax situations, to the delight of lawyers everywhere.
Another thing divorces do is create a lot of confusion regarding Social Security claims. If a couple was married for at least 10 years, an ex-spouse may be able to lay claim to spousal benefits based on the earnings history of their former spouse. As long as your ex-spouse is entitled to Social Security retirement or disability benefits, and you're at least age 62, unmarried, and the benefit you'd receive from your ex-spouse is higher than what you'd get based on your own work history, you can qualify for divorced spousal benefits. Best of all, the claim of an ex-spouse won't reduce the take-home benefit of the primary worker. It's a win-win for everyone.
7. Social Security has a do-over clause
Finally, did you know that Social Security offers its own version of a mulligan? If for some reason you regret filing for benefits at an early age (say, age 62, 63, or 64), you can undo your claim using Form SSA-521 (officially the "Request for Withdrawal of Application"). Undoing your claim would allow your benefits to continue growing at 8% per year until age 70 or when you decide to again file for benefits.
What's the catch, you ask? In order to qualify, you'll have to file Form SSA-521 within 12 months of first receiving benefits. Additionally, you'll need to repay every red cent you've received from the SSA in order to restore your benefits to unclaimed status. If, for example, you were forced to take benefits early because you couldn't find work, but wound up landing a well-paying job just months after your claim, this could be a really smart option to consider.
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